Making Trade Policy While Pursuing the War on Terrorism: Free Trade Remains the Objective, but Is a Step Back Sometimes Necessary for Two Steps Forward?

By Stern, Paula | Business Economics, April 2002 | Go to article overview

Making Trade Policy While Pursuing the War on Terrorism: Free Trade Remains the Objective, but Is a Step Back Sometimes Necessary for Two Steps Forward?


Stern, Paula, Business Economics


As in the war against communism, free trade is one of the most potent tools in combating terrorism. However, to move forward it is necessary to get broad agreement. This paper describes and discuss several critical aspects of current trade policy: (1) the Bush Administration use of US trade laws in the recent steel case and the role of the International Trade Commission as a safety value in moving toward freer trade; (2) The President's pending request to Congress for so-called fast track Trade Promotion Negotiating Authority (TPA) as a means of negotiating for freer trade, (3) The launch of the World Trade Organization (WTO) Doha Development Round, and (4) The Bush Administration's approach to intellectual property rights (IPR) protection. While moving toward free trade will always be a balancing act between domestic and international interests, it must always be recognized that increasingly open trade policies helped to win the Cold War and will also help to win the War Against Terrorism.

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They say that wars are God's way of teaching Americans geography. World War I and II helped us learn about Europe. We have since learned about Korea, Southeast Asia and Vietnam. Today it is Afghanistan and Southwest Asia.

It seems to work that way even at the highest levels. When President George W. Bush was candidate Bush, he did not know that Pervez Musharraf was Pakistan's head of state and chided his opponent, Vice President Albert Gore, for the Clinton Administration's pursuit of "nation building." Now, Musharraf is America's "new best friend," and U.S. policy is both making was and helping to build new national governments in Afghanistan and elsewhere.

Trade policy quickly gets involved when wars refocus America's attention. Pakistan's largest export is textiles, and the Bush administration is surely more sensitive to this fact now. By the same token, the details of the President's decision to protect the U.S. steel industry and the outlook for a new round of world trade negotiations are also impacted by the War on Terrorism.

It could not be otherwise. September 11 shook the world. Suddenly, U.S. foreign policy makers found themselves in an environment in which 1) building alliances; 2) neutralizing foes; and 3) strengthening relations with NATO nations, Japan, countries in Afghanistan's neighborhood--Pakistan and India and key republics of the former Soviet Union as well as Russia--are a top priority. All of these efforts are essential to the U.S. military response to Al Qaeda and to the long-term anti-terrorism effort. Other efforts include piecing together post-Taliban Afghanistan, actively engaging in the Arab-Israeli peace process, and trying to credibly assure allies like Turkey that the U.S. can create a stable regime in Iraq if we remove Saddam. This military and diplomatic activism affects trade policy. Unilateralism does not seem like such a good idea in this post-September 11 world, and U.S. trade policy for the past fifty years has been intimately connected to our foreign policy concerns.

The War on Terrorism: Cold War Redux

Tectonic shifts in U.S. policy are rare. When the Berlin Wall fell, it marked the implosion of the Soviet Union and the end of a half-century of Cold War. The attacks on the World Trade Center Towers and the Pentagon marked the beginning of a new War on Terrorism. The Bush Administration is taking entire chapters out of the book called "Containing Communism." There is no question about it: The War on Terrorism is America's 21st century equivalent of the Cold War: Cold War Redux.

Eradicating international terrorism is a goal that gives American policy an over-arching theme, just as the war on communism did. It helps to clarify the US military mission. After the collapse of the Soviet Union, Secretary of State and former General Colin Powell used to say in his stump speeches that he missed having that singular goal of fighting communism. …

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